Compared to traditional water heaters, one of the most obvious differences is its small size. Compact in design, tankless water heaters can be installed virtually anywhere. Tankless water heaters mount on the wall, inside or outside. Depending upon what your needs are, if you want fast hot water delivery, you can actually relocate the tankless heater closer to the fixtures you use most often. Therefore, a tankless not only saves you space, but can also save you water. Relocating a big, bulky tank to a location that makes more sense would definitely be a challenge.